Ethereum [ETH]: Whales control majority shares, but do not move it often, claims Chainalysis research

2019-05-17

The cryptocurrency market has always been susceptible to massive market movements, most of which are a result of holders called whales, crypto-users who possess a large number of coins. The latest report from Chainalysis suggests that so-called whales hold a third of all ETH and a fifth of all BTC. Chainalysis’ report stated,

“We took a deeper look into the role of Ether whales in the market and found that they account for just 7% of all economic transaction activity. Furthermore, these whales have no meaningful impact on the price of Ether; they do, however, make the market more volatile on a daily basis with their large sell-offs.”

The report claimed that Ether wales control a lot of Ether, but don’t move it very often. It further added that out of the 500 largest holders, 376 were whales. These whales controlled 33 percent of the total circulating supply in 2019, which was a fall from the 47 percent that whales held in 2016. According to Chainalysis, whales consistently hold 25%-40% of the total circulating supply of Ether, but even so, only account for only 5%-18% of the economic transaction volume.

There were other pointers from the report that dealt with the correlation between prices, as well as volatility in the market. Chainalysis reported,

“On average, a 1% increase in Bitcoin prices yesterday leads to a 1.1% increase in Ether prices today. We find no statistically significant impact of Bitcoin prices on Ether intra-day volatility. Funds that whales send to exchanges do not directly impact Ether price but they do contribute to price volatility.”

The report continued,

“On average, a whale that sends 1 million USD worth of ether two days ago leads to a 0.1 unit increase in intra-day volatility today, which is relatively small considering values of intra-day volatility range from 0.02 minimum to 417 maximum.‍”

Another piece of information revealed by the research was that the funds received by whales from exchanges, do not impact the price of Ethereum or intra-day volatility.